Let’s begin with a common story of money making mistakes we have in our business. One of my friends had started a coffee shop on a street of the city. He said that the shop was going to be popular.
At some point, he started to face some difficulties like rivals and not reaching the living income. He opened a new business of oil supply. He made some money here.
Afterwards local authority charged him for the low quality refinery system. It is because of the poor investment. He had to stop both businesses in this critical time. He went to previous job and saved money again.
One day he quit the job and returned to entrepreneurship. He started the production of eggs and meats. When the time went out he got a lose for poor knowledge of farming. Now he is not in a good condition and after demolition of the farm he is living with another new business of ecommerce. Now he is in a fund crisis.
Without a good amounts of capital he cannot go ahead. His reality is like his own fate of money mistakes. This is the new realization. Can you recognize what mistakes he actually made with his money in the story? Let’s try to identify those.
Money making mistakes
1. Going down in business without a plan
You have to plan before you start any work. That is the rule. Doing business also requires proper planning. If you start a business without a plan, the risk of problems in that business is much higher. My friend Duke Alex had no business plan. Business cannot be started in this way. So rushing into his business was a bad decision.
2. Investment before the capital is matured
Many people make this mistake. They save money. But they invest the savings before it got a little bigger. My friend did the same thing. The friend’s name is Alex. Alex is a given name here. He should have started the business a few more years later. Capital needed to be given a little more time to become an adult.
3. Not knowing well about products and services
It is not right to start a business without understanding the product or service. My friend was not well acquainted with the coffee shop business or the oil supply business. He did not know about refining oil well. People also need to know the pricing of the well refined products before starting the business.
4. Not understanding customer area and environment
My friend would not have had such a problem if he had started the business, knowing about the behavior of the people around the business area or their income, expenditure and enmity.
In particular, the strategy to avoid problems may have reduced the tension caused by the rivals if the strategy made before its opening. To avoid that problem he might be afforded or allocated money.
5. Do not seek the advice of a lawyer or business consultant before starting a business.
I always recommend going to a business consultant. Maybe you know a lot about business. But you have no experiences. As many businessmen go to business consultants regularly, in serving all of them, the consultant became rich enough in business knowledge. Lawyers know the legal aspects of business.
If my friend had gone to the lawyer, he might not have had to pay the fine for the oil refining problem. Or that business didn’t have to be wound up.
6. Starting one business after another in no time.
Many see it as foolish to start several businesses at the same time. My friend Alex did this nonsense. He started an oil business after a coffee shop. He also did some business then like drug business. I may not have said it above. It was a wrong way to make money. If one business started making sure profits, it would not be in danger if another business was opened.
7. Quickly shutting down the business in any problem.
If a problem arises, the problem needs to be reviewed in the right way. The right decision has to be made after review. It is foolish to start a business in a hurry. It is even more foolish to shut down a business in a hurry.
Many times it is seen that the crisis was temporary. Waiting a little longer might have cut it. My friend made the mistake of closing the business quickly without realizing it.
8. Not making proper efforts to solve the problem
The problem is to try to solve it in the right way. For example, if new machines and new equipment were purchased and new methods were used as a solution to the problem that arose in the oil business, the business might be able to make a profit in the future.
And when it came to legal issues, he needed to have the courage to move forward without fear. It would be better to correct the mistake through discussion with the authorities.
9. Endangering personal life
My friend invested all his savings together, but his personal life was in danger without a separate family fund. Many people do it. This is completely wrong. Life takes food, medicine, shelter, education, clothes and entertainment. It is not right to do business without securing family fund. It is an extreme mistake not to have funds for all this.
10. Repeating the same mistakes.
Very few people learn from the past. Not only do they learn from the past or history of others, but many also do not learn from their own past mistakes too. It is wrong not to take education. If you make the same mistake all the time, you might stay in the same circle over and over again. New stock trading mistakes also like this.
Read: Reasons for Investing in Venture Capital.
Last Words
Those who make these money making mistakes in personal finance cannot see their success. Even if it is wrong, it is necessary to get out of it by gaining the right knowledge and taking advice from the right person to plant the seeds of nourished capital and move towards business improvement. We learned about my friend’s experience through writing.
In fact, thousands of people make such mistakes in making money. So I shared it here. If you think something is missing, you can let us know by commenting or emailing.